Asian markets sink amid recession fears
Deccan Chronicle | DC Correspondent
International Monetary Fund forecast a 5.9 percent contraction for the US economy, worst global downturn since the Great Depression of 1930s
Asia markets subdued despite Wall Street rally. (AP Photo)
HONG KONG: Asian equities were lower in Wednesday trade, bucking an overnight rally on Wall Street prompted by encouraging signs that US coronavirus infection rates were in decline.
American officials are beginning to tackle the question of how to safely reopen for business and ease lockdowns that have helped slow the pandemic but battered the economy.
Major indices on Wall Street gained more than two percent overnight on signs that new virus cases had fallen in some of the country's biggest hotspots, including New York.
But analysts said it was too soon to herald a broader market turnaround after the International Monetary Fund forecast a 5.9 percent contraction for the US economy this year, and the worst global downturn since the Great Depression of the 1930s.
"Appearances can be deceiving as behind the headlines lies the most gnarly storm clouds building, suggesting there is still much to be worried about," said AxiCorp chief market strategist Stephen Innes.
"But flattening infection curves and the thoughts of more stimulus lifted all boats. And regardless of whether I think we are in la-la land, it is what it is."
Shanghai finished down 0.6 percent and Hong Kong was 0.7 percent lower despite export data on Tuesday showing Chinese trade volumes had fallen less than feared.
Tokyo slid 0.5 percent after a sharp rise in the last session, with a stronger yen weighing on investor sentiment.
Sydney ended 0.4 percent lower and Singapore fell 0.3 percent, but Seoul shot up 1.7 percent as South Korea voted in national parliamentary elections.
London was 0.3 percent down shortly after the opening bell.